Search Vs Social – the long tail of ad revenues

Google and Facebook together took away 64% of the total US online advertising spends. And Facebook had around 65% of the overall online display ad-spends. These are incredible levels of consolidation in the ad spends among the leaders.

search vs social long tail

Enough has been said and discussed about

While one cannot argue with the numbers and the line of reasoning, I somehow felt that this discussion has ignored the long tail of ad-revenues or the lead generation aspect of these platforms. These reports are focused on big co’s with big media budgets who may typically have brand-building as the key target.

Let me explain this in some more detail.

There is no doubt that for Google or Facebook, the big marketing dollars would come in from big spenders like Ford, Coca-Cola & Pepsis, Samsung, Levis, Red Bull, Wells Fargo, Amex etc.

But if we were to evaluate these platforms from a start-up point of view (small budgets and maybe need to do lead generation instead of brand building), the story is very different.

1. Social targeting is profile based, too many bidders

On Facebook, the same user may be targeted by multiple brands, because there is hardly any other context. E.g. a 35 yr old male who lives in a metro and has liked multiple lifestyle brands would be a good target for many.

We do NOT have additional context for the specific session on FB when the ad is being displayed. One FB session is hardly different from another in terms of the intent or maybe when mood based marketing algorithms evolve things would change.

This means, each of the target users FB session will appeal to all the brands. Multiple brands would be vying for that same ad-impression, which in turn means higher bid rates and CPMs etc etc.

And this means that small budget advertisers would be elbowed out of the platform by big budget cos.

While this article on Forbes also has the same conclusion, the logic used is very different.

2. Search has deep context, removes non-relevant advertisers

Search on the other hand has hugely relevant context. E.g. a user looking for Mortgage loan options on Google will be targeted by Financial Services brands vs someone searching for Fine Dining Options in India.

And this means, that as an advertiser you are just competing with other competitors or maybe some adjacent industry players.

Bid rates would be lower and even with small budgets one can get the message out to a relevant audience.

3. Lead qualification is efficient on search

If one is looking at online advertising for lead generation, chances are search may be a better platform.

Before the Facebook fans pounce on me, let me qualify my statement.

Many of us run “boring” ventures – we pitch services that consumers may not want to share. And/or we do not have the creative bench strength to get a funny/interesting message out. Our content strategy may still be a WIP. Realities of life.

If the message/ad we create has low viral coefficient (i.e. we do not expect people to share it much), Facebook may not be the best platform. Coz then we are burning marketing dollars to talk to a prospect who may not be primed for our services and who is also not helping spread the word.

Google, on the other hand is a very different story. If a consumer is online actively writing into the search box key words that resonate with your offerings, you may have a very interested customer. Intent is high.

Also, my guess would be that the long-tail ad-spends are stickier.


But all this is just my 2 cents on how small ventures, start-ups and SMEs should look at spending their advertising money online – across the broad theme of Search Vs Social Marketing for the long tail in particular.

What do you think?

 

Why are we becoming more insensitive

Are we really becoming more insensitive?

I usually have my breakfast at office and the TV in the cafeteria is typically tuned into some news channel. On quite a few days I end up watching “100 tez khabar” or something with a similar name on one of the Hindi news channel.

The other day it just hit me that I had been having my bfast without stopping for a moment, without battling an eyelid even when the news was showing stories about some murder and another accident where people lost their lives. I am not proud to say this, but I found that I was very low on compassion for the victims. I just could not relate to their pain. And I was shocked with myself.

I am not this insensitive.

Then why is it that I am unable to feel the pain of “others”.

How do we feel or experience emotions?

Over the past few years I have read a few essays and notes from some of the leading thinkers and scientists and it seems that our emotions are trigerred by some bio-chemical process typically initiated by specific glands. This was exactly what they said in Vipassana too.

What we feel, how we react is essentially some enzyme secretions.

So why are we becoming insensitive?

InsensitiveAs I looked to connect the dots, I came upon a hypothesis.

We are connected to more people now, which means more scenarios for us to have an emotional response. But our body has not evolved to handle this increased emotional stress.

Our generation is more connected than ever before. Thanks to Facebook, Mobile phones, Watsapp etc – we have made it easier than before for us to be connected to a larger group of people. We not only get regular updates from close friends and family, but we are also exposed to ups and downs in the lives of our old batchmates, colleagues etc.

And this in my opinion is where it all begins.

Do you really feel the joy of your school friend’s kid getting his yellow belt in Taekwondo. Maybe you do.

How about your ex-colleague’s buying the new iPhone?

Or the fact that your neighbor just checked into The Taj in Mumbai.

While we are now exposed to more triggers that expect an emotional response, our body’s capacity to handle it has not grown significantly.

If all emotionals have their origins in some gland or enzymes, there must be a limit to how much of that enzyme can be secreted. How much load can that gland handle. I am not a biology student but I think such drastic changes in capacity would need a mutation probably.

And that needs time.

While technology has changed our lives in last 7-8 years, our bodies need much much longer time to re-adjust to the new scenario.

So what does the body do if it cannot cope?

It tries to choose which ones to react to and which ones to ignore. I am not sure which part of us does this?

Is it a rational process driven by some specific areas in our brain?

I remember a study by Robin Dunbar where he laid out our social network in the form of 3 concentric circles. The inner most one consisting of close family and friends according to him can have a max of 5 people. The next one made up of people who we want to spend time with is limited to 15 people and so on. Very interesting if you note the limit he places on both the circles.

Could it be that this limit is due to our body’s constraint in generating an emotional response.

So my hypothesis is that when faced with a tsunami of updates, our body just cannot cope up and the way we adapt to it comes across as insensitive.

And if this is true, then one of the biggest negative impact of the social media revolution would be a fundamental erosion in human ties, coz the emotional depth would be missing.

So how do we cope?

I don’t know. But what I have started doing is reducing my exposure to updates (by blocking posts from people whom I can barely remember, by not watching or reading too many news updates, by choosing what I read for most part of the day).

For a digital enthusiast like me, this is tough, but I feel it needs to be done. Now.

Customer Complaints and Social Media

Facebook, Twitter, LinkedIn and other social platforms have provided an immense tool in the hands of the consumers. Suddenly the lone voice of the consumer, can get magnified if it resonates with a significant number of people – some from her own network, some who discover her woes and views through the sheer virality of the platform or the content.

While many brands have seen a lot of success with Facebook fan registrations, and started using it as a smart way to advertise. Many others have had a mixed response so far.

But for most brands, their biggest fear with social media, is the reputation loss due to consumer complaints. A research by A.T. Kearney’s on social media found that between 5% and 20% of all complaints to many organisations are made through social media. Not a channel to be ignored, if you want to keep your customers happy.

And its interesting how they have chosen to address this risksocialmedia-customer-service

They Just Ignore or Deny it

It has been documented through multiple surveys that more than 70% of consumer complaints on Facebook pages of brands are ignored. Add to this many more who just delete the customer queries or complaints. (7 out of 20 retailers did this in the Stella service sponsored exercise).

They respond one-on-one to the customer

Many companies and their customer-care teams, believe that the complaint related discussion and the resolution should be one-on-one either on phone or email. This allows the service team, sufficient elbow room to understand the issue, without getting distracted with the background noise, which may or may not be related to the specific query. Sound logic there.

But don’t forget to showcase the final resolution on the same platform. Why? because according to an American Express study , companies that resolve customer complaints via social media platforms like Twitter and Facebook see 21% more sales than companies that handle complaints on the telephone or in written form. Do see the attached infographic for more details.

They resolve it on the Platform itself

Many a brands have embraced Facebook/Twitter boldly and have started responding to customer queries directly on the platform. It is obvious, that this requires higher levels of empowerment for the individual staff members, a robust training on what messages to use (canned or otherwise) and access to customer/prospect data to swiftly resolve the query.

The successful ones have tried to follow these 3 simple rules:

  1. Don’t waste time in responding (less likely that the issue would snowball)
  2. Don’t shift blames (customers are mostly seeking a resolution and see all teams as the same brand)
  3. Don’t be defensive
Some leave it for the specialists

There are a few rapidly growing firms and agencies who have added social-media-customer-complaints-resolution as a key offering in their portfolio.

 

Facebook advertising will not grow too fast too long

facebookI have been looking at the countless ads & “LikeUs” banners that keep popping up on my Facebook account and I am tempted to feel that all this jubilant rejoice about the advertising/branding power of social networks might just be a temporary phenomenon. I feel that there would be a fatigue soon & think there are multiple sources for that to creep in.

  1. Almost every big brand & local business seems to have its own page on Facebook. This means that the number of brands competing for your attention online, in all probability include all the brands you live with. This would make the CPC/CPM rates go high. Bidding and ad placement is not contextual- its only demographic targeted. Local and small businesses will not be able to participate for long, they can just hope to do a small time campaign to get few “fans” on their pages.
  2. Little or No Context. The fact that Google ads grew so fast was that they could figure out what you were searching/reading/browsing & hence target brands/products/services relevant to that. I think Facebook has a serious limitation here. Most users, I suspect use it to track what friends are thinking/doing and in a smaller # of cases they would be looking at pages relevant to hobbies or for information about places/brands etc. Facebook would have to change this behaviour the other way round to build sustainable advertising revenues.
  3. Advertising OverLoad. I think with most brands embracing Facebook, an average user might now be following five times as many businesses & brands as she did last year. But I can safely assume that her time on Facebook & specifically on brand pages has not increased proportionately. Are you really spending so much time tracking all the brands you follow on Facebook? Not just the time & attention, there is a genuine problem of discovery also- the same issue that most mobile app stores face once they grow too big. How do you keep track of  all the updates from all the brands.
  4. No proxies for customer profile. When we advertise on the net, chances are we can do some sane assumptions about who would see the ad. E.g. if I look at MoneyControl, I can be confident that many of these customers would be active investors in the Equity market & hence probably a good target for a broking firm. There is no such proxy on the social network giant. How do I get similar info on Facebook – Say income bracket etc. I have seen college kids subscribe to luxury brands and it must be a big worry for the marketing manager there to understand how the clicks he pays for are done by relevant people only.
  5. Decreasing value of ThumbsUp. There was a time when I would have noticed/opened/read most of the likes done my some of my friends on Facebook. With the new flood of likes, I have my own sense of distrust and feel that any of us like too many things/updates. If this is Facebook’s entrypass for brands into each user’s network, the value is fast decreasing. Most users would not honor the “Likes” of their friends as they used to before.

Well I have nothing against Mark or the biggest virtual country that has been created, but I sincerely hope some of these issues are being addressed by those smart boys back in the Valley. I would really want to see FaceBook become and stay a stable advertising medium.